The purpose of the smaller locking pin hole in the factory locking receiver?

I’ll apologize in advance if this is considered a cross-post from what I’ve posted on the towing and hauling tech forum, but I’m posing here as I change the question to be a bit more specific.

The OEM sticker comes with two mounting holes. All the shocks I used before had only one. The normal size bore is much closer to the rear end of the receiver than I am used to. The hole that is further back, at the distance I would normally expect the hole to be, has a washer attached to it to greatly reduce the size of the hole.
What’s the point of the smaller hole if you can’t put a normal sized needle through it?

I believe it’s for the locking pin on the bike rack and I have a bike rack that when fully inserted into the receiver the smaller hole lines up with the mounting hole in the bike rack but the hole is just a little small for the threaded section of the the rack fixing pin, which screws into the bike rack to stop the noise.

I think I should make the hole a bit larger, but I want to make sure the smaller hole doesn’t have another purpose before I modify it.

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